This Diwali, the sparkle of festive lights is mirrored in the gleam of India’s shopfronts and marketplaces. With the Confederation of All India Traders (CAIT) projecting record-breaking festive sales exceeding Rs 4.75 lakh crore, India’s retail sector is witnessing one of its most resplendent seasons in recent memory. The swell, traders say, is more than a post-pandemic rebound it’s a cultural and economic reaffirmation of the ‘Vocal for Local’ ethos that’s reshaping consumer behaviour across the country.

The new festive economy with a swadeshi touch

For decades, Diwali has been India’s retail barometer a reflection of both consumer confidence and broader economic sentiment. But 2025 stands out. As per CAIT, sales are up nearly 17 per cent year-on-year, pushed up primarily by strong consumer preference for Indian-made products, from artisanal diyas and sweets to homegrown fashion labels and regional handlooms.

Table: Festive retail indicators (Diwali 2025)

“The Indian consumer has spoken, Diwali is no longer just about celebration, it’s about contribution,” says Praveen Khandelwal, Secretary General of CAIT. “This year’s record numbers reflect not just spending power, but pride in supporting local enterprises.” This cultural shift toward swadeshi retailing has lifted categories long overshadowed by imported or mass-produced goods. Particularly, apparel and textiles contributing nearly 12 per cent of total festive expenditure have emerged as the star performers.

The rise of swadeshi apparel

The festive wardrobe is where tradition meets consumer sentiment. Shoppers are not merely buying garments; they’re buying stories of craftsmanship from Surat’s textile mills, Ludhiana’s knitwear units, and Tirupur’s cotton clusters. A look at the data compiled by the Textile Ministry and industry trackers.

Table: Textile hub estimated Diwali performance

These regions are working round the clock to meet domestic demand, which industry executives say has outpaced export orders for the first time in five years. And as a Surat-based textile manufacturer puts it, their looms are busier than ever. For once, local demand is giving better margins than exports.

Ethnic wear and traditional attire dominate this festive cycle, with kurta-pajama sets, lehengas, and handloom saris recording 25-30 per cent higher sales compared to 2023. Women’s ethnic wear retailers like FabIndia, Biba, and Manyavar report double-digit growth, while newer D2C labels like Libas and House of Chikankari are seeing brisk business both online and in pop-up stores across Tier II, III cities.

Offline reigns supreme, with zonal hotspots

Despite e-commerce’s steady rise, Diwali 2025 marks the emphatic return of offline retail. CAIT’s survey suggests that over 75 per cent of festive sales occurred through physical retail channels, underscoring the emotional and experiential pull of in-person shopping during the festive season.

Table: Estimated festive sales by region (2024)

Markets from Delhi’s Chandni Chowk to Ahmedabad’s Law Garden and Chennai’s T Nagar are witnessing heavy footfall, with store owners reporting inventory turnover rates up by 25-30 per cent. “After years of digital-first strategies, this Diwali has reminded us of the irreplaceable joy of physical retail,” says Sanjay Sethi, CEO of ShopClues. “The tactile experience, feeling a silk sari or trying on a sherwani still defines India’s festive shopping.”

GST reforms, a festive windfall

Another undercurrent powering this record season is the NextGen GST reform, which simplified tax slabs to primarily 5 per cent and 18 per cent, effectively reducing prices across multiple consumer categories.

Table: Tax rate changes and retail price drop

CAIT estimates these revisions alone contributed to an additional Rs 40,000 crore in consumer spending power this Diwali. “The simplified rate structure is a clear sign of the government’s intent to energize consumption,” notes Anil Talreja, Partner at Deloitte India. “It not only reduces compliance burdens but gives a psychological boost to consumers looking for value.”

The hospitality and service sectors have also ridden this wave with restaurants, hotels, and event organizers reporting 20-25 per cent higher bookings as families dine out and travel during the extended holiday week.

Potential challenges, clouds beneath the glitter

However, the dazzling numbers mask a few underlying concerns. Trade bodies warn that small retailers remain vulnerable to e-commerce deep discounting, which intensifies during the festive rush. Logistics and supply chain disruptions including last-mile delivery delays and labour shortages in manufacturing hubs continue to strain operations.

Additionally, looming US tariff measures on Indian textile exports could temper the post-festive export recovery, even as domestic sales thrive. “It’s a festive season of resilience, but not complacency,” says Rachna Nath, Retail Sector Leader at PwC India. “The underlying structural issues from supply bottlenecks to uneven digital adoption need long-term policy attention.”

A confident consumer, a confident India

Despite the challenges, India’s retail sentiment remains overwhelmingly positive. With household incomes stabilizing, inflation moderating, and urban employment picking up, consumer confidence is at a five-year high, according to a recent RBI consumer survey. CAIT forecasts that the momentum will likely extend into Makar Sankranti and Holi 2026, potentially pushing FY26 retail turnover beyond Rs 120 lakh crore, a testament to the resilience of India’s consumption-driven economy. “This Diwali, India didn’t just light lamps it reignited faith in its markets,” says Khandelwal. “The message is clear: when consumers go local, the nation grows global.”

The Indian Government has approved the establishment of PM Ekta Malls in 27 states to promote local craftsmanship and products.

Encompassing nearly all of India except West Bengal, these malls are designed to be dedicated retail spaces for showcasing and selling indigenous products under the 'One District, One Product' (ODOP) initiative, along with Geographical Indication (GI)-tagged goods and local handicrafts.

For FY23-24, the Union government approved projects totaling nearly Rs 4,796 crore. Uttar Pradesh received the largest allocation of Rs 370.25 crore for three Ekta Malls in Agra, Lucknow, and Varanasi, reflecting the state's vast size and diverse craft traditions. Madhya Pradesh followed with Rs 284 crore for a mall in Ujjain, while Assam secured Rs 226 crore for its project in Guwahati. Tamil Nadu (Rs 223 crore for Chennai) and Bihar (Rs 212.69 crore for Patna) also received substantial support. Other notable allocations include Gujarat and Telangana, each sanctioned Rs 202 crore, and Maharashtra, receiving Rs 195.14 crore for a mall in Navi Mumbai.

Under SASCI guidelines, states submitted DPRs on a first-come, first-served basis against a total earmarked budget of Rs 5,000 crore. States are required to provide land for these malls free of cost or cover acquisition expenses.

Prasada emphasized, this initiative aims to create retail-level visibility for India's traditional and regional products, offering artisans and producers a permanent marketing platform in prime urban locations. The malls have been strategically planned for state capitals, financial hubs, or tourism centers to maximize visibility.

While 27 states have secured approvals and funding, some regions, including West Bengal, Delhi, Jammu & Kashmir, Chandigarh, Ladakh, Andaman and Nicobar Islands, and Lakshadweep, are yet to begin work or receive central clearance for their projects. This ambitious initiative is expected to significantly boost the sales of ODOP and GI products, expanding market access for artisans, weavers, and small producers, thereby fostering local entrepreneurship and self-reliance.

Fashion retail brand of Trent, Westside has launched the Young New Game-changer (YNG) program to support up-and-coming talent in India's fashion industry. The initiative provides a professional platform for the next generation of designers and creators to show off their skills.

For its first project, Westside partnered with the National Institute of Fashion Technology (NIFT), Students were invited to reimagine two of Westside's well-known in-house labels, Bombay Paisley and ETA. This collaboration led to the creation of YNG, a capsule collection designed for Gen Z.

The YNG collection debuted at Westside's Media Day, an event that gathered media, influencers, industry partners, and customers to unveil the new line alongside the brand's seasonal fashion show.

Shailina, COO, Westside, says, through YNG, the brand emerging talent the opportunity to design for real brands, build strong portfolios, and gain valuable industry experience while being rewarded for their work.

The development of the collection was documented in a mini-series called ‘From Sketch to Store: The YNG Journey,' which showed the creative process from initial sketches to the final collection. The first episode featured the design duo Saaksha and Kinni.

By launching YNG, Westside has strengthened its position as a purpose-driven retail brand in India, showing its commitment to shaping the future of fashion by supporting new voices and creating pathways for creative talent to grow within the industry.

A Kerala-based women’s fashion brand, Vismay aims to operate approximately 100 EBOs and 50 MBOs over the next two years. The brand has launched its latest store in Nellore, Andhra Pradesh.

Located in MGB Felicity Mall, this new store reflects the brand’s focus on expanding its footprint across high-potential Tier-II & III markets. With the brand’s first store opening in the city this financial year, Nellore stands as a step forward in its larger retail strategy—focused on regional relevance, deeper customer engagement, and long-term growth.

Founded in 2004, under the leadership of Novelty Textile, Vismay focuses on fluid designs, breathable fabrics and modern styles.  The brand’s design approach conforms to the tastes of Nellore’s shoppers. The store’s curated offerings reflect the brand’s preference for bright palettes, detailed prints, and well-fitted ethnic wear.

Since launching its initial retail outlet in 2016, Vismay has expanded its presence, currently boasting a network of over 35 stores spanning across more than 30 cities nationwide, as per its official website.

In a significant intellectual property decision, a court has sided with Indian conglomerate Reliance Industries (RIL), barring Ludhiana-based Jaipal Gaba and his company, Mack Hosiery, from using the well-known 'Vimal' trademark on their clothing products. The ruling affirms RIL's exclusive rights to the 'Vimal' brand name.

The Gujarat High Court recently upheld an earlier order from a Commercial Court in Ahmedabad, which had prohibited Jaipal Gaba and Mack Hosiery from selling apparel under the brand names 'Vimal,' 'Vimal Jonney,' and 'Mack Vimal.' This legal action followed a lawsuit filed by RIL alleging trademark infringement.

RIL initiated the lawsuit in 2021, asserting its exclusive ownership of the 'Vimal' trademark. The company stated that it has actively used the brand since 1967 and has it registered under Class 24, which covers textiles and textile goods. RIL emphasized the substantial investments made over the decades to build the 'Vimal' brand's reputation, including high-profile endorsements by major film and cricket celebrities.

The complaint detailed how Jaipal Gaba and Mack Hosiery, who sell their products through various online platforms, were prominently using the 'Vimal' trademark on similar goods such as apparel, ready-made garments, T-shirts, and shirts. RIL also pointed out that Gaba’s products used the ‘Reliance’ name alongside ‘Vimal,’ further compounding the trademark infringement issue.

In his defense, Gaba challenged the court's jurisdiction, arguing that the Ahmedabad court lacked authority since his business primarily operates in Punjab and other states. Gaba claimed his rights to the 'Vimal' brand stemmed from a separate registration under Class 25 (covering clothing, footwear, and headgear) by Milap Hosiery, with records dating back to 1976. He presented an assignment deed from 1986 that supposedly transferred usage rights to him and noted registrations for 'Vmark,' 'Vimal Jonney,' and 'Mack Vimal' between 2016 and 2018, supported by user details from 1993.

Following an initial hearing, the court observed that while RIL’s and Gaba’s products fall under different trademark classifications, they are commonly sold in the same retail environments and are closely related in the eyes of consumers. Given RIL’s long-established use and strong brand recognition, the court determined RIL to be the prior user of the 'Vimal' trademark.

The court further reasoned that the similarity between the brand names could lead to consumer confusion, especially considering RIL’s significant nationwide brand visibility, while Gaba’s market presence is more limited. The court stated that RIL had presented a prima facie case for passing off under the Trademarks Act, finding that Gaba’s use of ‘Vimal,’ ‘Mack Vimal,’ and ‘Vimal Jonney’ was misleading and infringed upon RIL’s established goodwill.

Subsequently, the Gujarat High Court upheld the commercial court’s injunction, reinforcing RIL’s trademark protection for its iconic ‘Vimal’ brand.

Ramprasad Sridharan, CEO, Benetton India, is stepping down to pursue a new professional opportunity. He will continue to manage the business during the transition period to ensure a smooth succession.

Claudio Sforza, CEO,Benetton Group, states, India has been an important market in Benetton's growth journey and it will continue to be a priority for the brand. With their strong brand presence and continued consumer trust, the group sees clear opportunities for growth and will remain focused on building the business in a consistent and sustainable way. Praising Sridharan’s contributions over the past four years, Sforza highlights his role in increasing the company's retail footprint and strengthening consumer engagement across the country.

Under Sridharan's leadership, Benetton India increased its retail presence significantly. The company currently operates close to 300 standalone stores, which include both company-owned and franchise locations. It currently operates over 1,000 total retail touchpoints nationwide, encompassing both online and offline channels.

An iconic Indian menswear brand, Reid & Taylor plans to launch 40 stores by 2025-end. The brand recently opened an exclusive store at Little World Mall in Kharghar, Navi Mumbai. This launch is a major step in the brand's nationwide expansion plan, solidifying its position as a top-tier destination for men's ready-to-wear clothing.

The store features Reid & Taylor’s signature lines, including dress shirts, pants, suits, and carefully selected accessories, creating a one-stop shop for men looking for stylish and sophisticated looks. Its placement in Little World Mall is expected to attract a diverse customer base, including professionals, those shopping for weddings, and fashion-forward young men, further boosting the brand’s visibility and presence in the region.

This new store in Kharghar underscores the brand’s commitment to making Reid & Taylor's refined menswear more accessible to its valued customers across India, states Subrata Siddhanta, CEO –Apparel & Retail, Reid & Taylor.

The brand’s rapid retail rollout aligns with its goal to re-establish the brand as a standard-bearer for timeless elegance and top-notch craftsmanship. With this latest opening, Reid & Taylor is maintaining its momentum as it reclaims its legacy in the Indian fashion scene through strategic retail growth, high-quality offerings, and a focus on providing excellent customer experiences, he adds.

A contemporary ready-to-wear brand from The House of Arvind, AD has appointed actor and youth icon Raghav Juyal as its new brand ambassador.

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Known for his authentic and effortless style, Juyal embodies AD’s commitment to comfortable, breathable, and fashionable everyday clothing designed for the modern generation.

Pranav Dave, Chief Business Officer - Retail & Knits, Arvind Limited, states.

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Juyal's individuality and effortless style align seamlessly with the brand’s ethos. AD is about creating versatile, easy-to-wear fashion that fits into everyday life while making people look and feel confident.

Juyal brings that spirit alive with his relatable and charismatic personality.”

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Juyal adds. the brand represents fashion that is relaxed yet stylish, something I personally relate to. For me, comfort is non-negotiable, and AD delivers exactly that while keeping it trendy."

With Juyal on board, AD is set to launch a new campaign across digital platforms, retail stores, and marketplaces to celebrate effortless and confident everyday fashion.

The collection is currently available at The Arvind Store, Myntra, and other major e-commerce platforms.

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Flipkart plans to sell its entire 6 per cent stake in Aditya Birla Fashion and Retail (ABFRL). Expected to be finalized today, the deal is estimated at approximately Rs 600 crore.

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This development follows closely on the heels of ABFRL’s strategic decision two weeks ago to demerge its lifestyle business into a new entity, Aditya Birla Lifestyle Brand (ABLBL).

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This newly formed company will encompass key brands from the Madura Fashion portfolio, including popular names like Louis Philippe, Van Heusen, Allen Solly, and Peter England.

Following the demerger announcement, brokerage firm Nuvama Institutional Equities downgraded ABFRL’s rating from a ‘Buy’ to a ‘Hold,’ adjusting its target price to $10.07 (Rs 84).

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In Q4, FY25, ABFRL reported a consolidated net loss of Rs 23.55 crore as compared to the Rs 266.36 crore loss recorded in the same period last year. The company’s revenue from operations increased to Rs 1,719.48 crore from Rs 1,575.12 crore in the corresponding quarter of the previous year.

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As ABFRL undergoes these significant structural changes and navigates market reactions, investor sentiment is expected to remain closely tied to the upcoming listing of ABLBL and the outcome of Flipkart’s strategic exit.

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